Go to Jeff Salisbury LWGate Home Page.From: "Katherine Malm" <kmalm@earthlink.net>
Subject: Re: [CANSLIM] Yahoo in trouble or wising up?
Date: Wed, 3 Jul 2002 09:26:26 -0500
Previous Article (by Date): Re: [CANSLIM] DGO/IBD "Winston Little"
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Kelly,
Interesting you should bring up Yahoo, as there was a very good article =
on the failure of Broadband Internet and reference to Yahoo at =
yesterday's Briefing.com. From a CANSLIM perspective, I think it's an =
important one, as it shows that the technology direction that everybody =
was betting on may not come to fruition. I'm even inclined to mark it =
off my macrotheme list altogether. Up to now, I've been watching for =
signs of the ultimate broadband "killer app" , and technology and/or =
legislation which would solve the last mile problem. Turns out it may =
just not be something we'll need to monitor for some time to come. Darn, =
guess I'll have to do some more studying on immerging =
technologies....but then again, maybe I'll just go take a swim....
Katherine
PS Article pasted after Kelly's message....
- ----- Original Message -----=20
From: Kelly Short=20
To: canslim@lists.xmission.com=20
Sent: Wednesday, July 03, 2002 9:14 AM
Subject: [CANSLIM] Yahoo in trouble or wising up?
Yahoo has recently ejected their streaming financial tv/internet service =
("the only one of its kind"? hello Bloomberg) and now Ziff-Davis is =
pulling Yahoo Internet Life. Is Yahoo in trouble, ejecting dogs, or are =
they wising up and returning to their roots? (Sergey Brin, cofounder of =
Google, calls it "their biggest mistake" straying from a search engine).
today's article on Internet Life: =
http://cbs.marketwatch.com/news/story.asp?guid=3D%7BEC1E19EB%2D6ECE%2D404=
B%2DB521%2D849F9797C744%7D&siteid=3Dmktw
Kelly
=3D=3D=3D
Broadband's Failure - The Real Reason=20
02-Jul-02 09:20 ET=20
=20
[BRIEFING.COM - Robert V. Green] Last week, Yahoo announced that =
they were shutting down their broadband product lines that create =
original content, including Yahoo! FinanceVision and Yahoo! Radio. =
Herein lies a key, simple explanation as to why broadband has been slow =
to be adopted - and why broadband will not revive the technology =
vendors.=20
Why Broadband Is Important
Broadband technology was widely viewed as the next wave of the =
great internet buildout. Internet I, as it was called, was the textual =
internet. Internet II was viewed as the visual internet.=20
As late as 1999, the internet II was viewed as the next phase =
which would take the internet revolution, and stock market boom, to even =
higher heights. The internet infrastructure would have to be doubled, =
benefitting every level of network supplier, including: Cisco, JDS =
Uniphase, Exodus Communications, etc.=20
Even the collapse of the textual internet dot-com companies did =
not deter some investors from believing in the internet II broadband =
vision. The AOL/Time-Warner merger was supposed to the king of the new =
broadband era. But that never happened.=20
In fact, many still view broadband - meaning streaming video and =
audio - as the great technology white-horse that could rescue the =
technology industry from its current slump.=20
And it isn't going to happen. At least, not in the foreseeable =
future.=20
The Real Problem
Broadband video applications failed because of one simple reason:=20
You can't watch TV at work.
Face it, the vast number of internet users are using the internet =
at work, instead of working. And broadband video is essentially the same =
as TV.
Certainly on-line brokerage accounts owed their great emergence to =
one simple fact: you could finally trade stocks at work.=20
Online trading software existed before the internet came along, =
but it was largely considered a colossal failure. FOX (Fidelity Online =
Exchange) software, manufactured by Meca Software (now defunct) was a =
huge disaster in the early nineties. Why? Because you couldn't use this =
software at work. It required that you dial-in, on a modem, to the =
system. Office PCs didn't easily have this capability.=20
When the internet came along, access to online trading was simple. =
Internet access, especially in the beginning, was completely open. =
Anyone could trade. Instead of calling your broker (which others in the =
office would be able to hear), you could enter a trade - and it would =
look like you were working. Not only that, but it was cheaper than a =
trade from even a discount broker.=20
Online trading, and all of the associated internet activities with =
it, boomed. Internet trading made an existing task easier and cheaper: =
online trading liquifiedthe market for market transactions.=20
The applications which were successful on the internet during =
Internet I days all had the following aspect in common: they liquified =
an existing trait or business. Chat rooms liquified water cooler talk. =
Email liquified phone calls. Instant messaging liquified email.=20
But broadband video doesn't liquify anything, especially in the =
business arena.=20
Yahoo! FinanceVision failed because it is neither cheaper nor =
easier than watching CNBC and most offices don't watch CNBC anyways! =
Because of this, no one was willing to pay for it.=20
The Future For Business Broadband
So if broadband is to succeed in the business market, it needs to =
liquify an existing business function.=20
At the moment, teleconferencing is the most likely business event =
to be liquified by broadband video.=20
However, here, audio already works remarkably well, and the price =
has been continually dropping. Audio conference meetings are becoming =
more popular and more frequent. Broadband audio conferencing stand =
little chance of replacing the audio teleconference.=20
Webcasting of conference calls, now widespread, does not replace =
ordinary teleconferencing, although it has reduced dial-up 1-800 costs. =
However, those costs are replaced by the costs of providing the webcast =
service.=20
Technologies such as webconferencing (Webex or Interwise, for =
example) are growing in popularity. These allow a company to present =
Powerpoint presentations or multi-media presentations over the internet. =
These services liquify a sales call. They probably have strong futures.=20
But the webconferencing technologies all work well with existing =
internet infrastructure. Even rapid growth in webconferencing will not =
provide a strong driver to building out the "internet II" network, with =
the anticipated benefits to Cisco, Juniper Networks, Sycamore, etc. =
Webconferencing services work well with today's infrastructure.=20
Other than webconferencing, what existing business function does =
broadband replace, at lower and easier costs? If you cannot provide an =
answer, broadband cannot be viewed as a dramatic driver of the internet =
infrastructure.=20
The Future For Consumer Broadband
Consumer broadband prospects are even fuzzier.=20
The truth is that broadband simply costs too much for much home =
markets. Most people use the internet primarily for email and instant =
messaging. AOL has about half of the consumer market - and that's what =
they think the internet is - email and IM.=20
TV rules the video entertainment market. Broadband internet video =
is neither cheaper (it is often more expensive than cable) nor easier =
(the remote control beats keyboard/mouse easily) than TV. Until it is, =
broadband will not dethrone TV as the video device of choice.=20
To make matters even worse, content for broadband video is =
significantly worse than for TV, because the best TV content has been =
syndicated to TV, not the web.=20
Pornography is the only significant broadband service. It provides =
pay-per-view video and is a lot easier, and more private, than going to =
the XXX video store. Quality of video does not matter. Broadband =
pornography liquifies the existing porno market.=20
But there is nothing on broadband today that liquifies the home =
video entertainment market. In fact, there is a lot working against =
broadband: TiVo and DVD subscription services are just two major =
drivers.=20
Until broadband, internet-based on-demand-video gets linked to the =
TV, and not the PC, broadband will not have significant penetration =
difficulties in the consumer market.=20
The Implications
For those of you thinking "Great - why didn't you tell me earlier" =
we did. Any frequent reader of our Stock Briefs knows that we have long =
been discussing this. We became luke-warm on the "internet II" idea =
years ago:=20
a.. 23-Oct-00 The Broadband Future Gets Fuzzy=20
b.. 27-Nov-00 The Internet: What We've Learned=20
If you are still waiting for broadband - Internet II as it is =
called - to rescue the tech sector - forget it. You need to develop =
another premise for a major driver of technology stocks. (Good luck - we =
haven't been able to.)=20
Broadband applications are likely to continue to develop, but =
slowly, and not be a major driver of the overall technology market and =
certainly not be a major driver of continued internet buildout.=20
Unlike cable TV or satellite TV, both of which took their markets =
by storm, broadband video is still looking for the key element that =
would make it a bull market: liquifying an existing market. Until that =
happens, broadband applications are likely to continue to struggle to =
find meaningful markets.=20
Yahoo! found this out the hard way with Yahoo FinanceVision and =
Yahoo Radio.=20
Comments may be emailed to the author, Robert V. Green, at =
rvgreen@briefing.com=20
=20
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<BODY bgColor=3D#ffffff>
<DIV>Kelly,</DIV>
<DIV> </DIV>
<DIV>Interesting you should bring up Yahoo, as there was a very good =
article on=20
the failure of Broadband Internet and reference to Yahoo at yesterday's=20
Briefing.com. From a CANSLIM perspective, I think it's an important =
one, as=20
it shows that the technology direction that everybody was betting on may =
not=20
come to fruition. I'm even inclined to mark it off my macrotheme list=20
altogether. Up to now, I've been watching for signs of the ultimate =
broadband=20
"killer app" , and technology and/or legislation which would solve the =
last mile=20
problem. Turns out it may just not be something we'll need to monitor =
for some=20
time to come. Darn, guess I'll have to do some more studying on =
immerging=20
technologies....but then again, maybe I'll just go take a swim....</DIV>
<DIV> </DIV>
<DIV>Katherine</DIV>
<DIV> </DIV>
<DIV>PS Article pasted after Kelly's message....</DIV>
<DIV> </DIV>
<DIV>
<DIV style=3D"FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B> <A=20
title=3Dkelly.short@neoris.com =
href=3D"mailto:kelly.short@neoris.com">Kelly=20
Short</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A =
title=3Dcanslim@lists.xmission.com=20
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Wednesday, July 03, 2002 =
9:14=20
AM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> [CANSLIM] Yahoo in =
trouble or=20
wising up?</DIV>
<DIV><BR></DIV>
<DIV><SPAN class=3D899491014-03072002><FONT face=3DArial color=3D#0000ff =
size=3D2>Yahoo=20
has recently ejected their streaming financial tv/internet service ("the =
only=20
one of its kind"? hello Bloomberg) and now Ziff-Davis is pulling Yahoo =
Internet=20
Life. Is Yahoo in trouble, ejecting dogs, or are they wising up and =
returning to=20
their roots? (Sergey Brin, cofounder of Google, calls it "their biggest =
mistake"=20
straying from a search engine).</FONT></SPAN></DIV>
<DIV><SPAN class=3D899491014-03072002><FONT face=3DArial color=3D#0000ff =
size=3D2></FONT></SPAN> </DIV>
<DIV><SPAN class=3D899491014-03072002><FONT face=3DArial color=3D#0000ff =
size=3D2>today's article on Internet Life: <A=20
href=3D"http://cbs.marketwatch.com/news/story.asp?guid=3D%7BEC1E19EB%2D6E=
CE%2D404B%2DB521%2D849F9797C744%7D&siteid=3Dmktw">http://cbs.marketwa=
tch.com/news/story.asp?guid=3D%7BEC1E19EB%2D6ECE%2D404B%2DB521%2D849F9797=
C744%7D&siteid=3Dmktw</A></FONT></SPAN></DIV>
<DIV><SPAN class=3D899491014-03072002><FONT face=3DArial color=3D#0000ff =
size=3D2></FONT></SPAN> </DIV>
<DIV><SPAN class=3D899491014-03072002><FONT face=3DArial color=3D#0000ff =
size=3D2>Kelly</FONT></SPAN></DIV>
<DIV><SPAN class=3D899491014-03072002><FONT face=3DArial color=3D#0000ff =
size=3D2></FONT></SPAN> </DIV>
<DIV><SPAN class=3D899491014-03072002><FONT face=3DArial color=3D#0000ff =
size=3D2>=3D=3D=3D</FONT></SPAN></DIV>
<DIV><SPAN class=3D899491014-03072002><FONT face=3DArial color=3D#0000ff =
size=3D2></FONT></SPAN> </DIV>
<DIV><SPAN class=3D899491014-03072002>
<TABLE cellSpacing=3D0 cellPadding=3D4 width=3D"100%">
<TBODY>
<TR>
<TD class=3Dheader>Broadband's Failure - The Real Reason</TD></TR>
<TR>
<TD><FONT class=3Ddate face=3DVerdana =
size=3D1><STRONG>02-Jul-02 09:20=20
ET</STRONG></FONT></TD></TR>
<TR>
<TD height=3D8><STRONG><FONT face=3DVerdana =
size=3D1></FONT></STRONG></TD></TR>
<TR>
<TD>
<P>[BRIEFING.COM - Robert V. Green] Last week, Yahoo announced =
that they=20
were shutting down their broadband product lines that create =
original=20
content, including Yahoo! FinanceVision and Yahoo! Radio. Herein =
lies a=20
key, simple explanation as to why broadband has been slow to be =
adopted -=20
and why broadband will not revive the technology vendors. </P>
<H3>Why Broadband Is Important</H3>
<P>Broadband technology was widely viewed as the next wave of the =
great=20
internet buildout. Internet I, as it was called, was the textual =
internet.=20
Internet II was viewed as the visual internet. </P>
<P>As late as 1999, the internet II was viewed as the next phase =
which=20
would take the internet revolution, and stock market boom, to even =
higher=20
heights. The internet infrastructure would have to be doubled, =
benefitting=20
every level of network supplier, including: Cisco, JDS Uniphase, =
Exodus=20
Communications, etc. </P>
<P>Even the collapse of the textual internet dot-com companies did =
not=20
deter some investors from believing in the internet II broadband =
vision.=20
The AOL/Time-Warner merger was supposed to the king of the new =
broadband=20
era. But that never happened. </P>
<P>In fact, many <I>still </I>view broadband - meaning streaming =
video and=20
audio - as the great technology white-horse that could rescue the=20
technology industry from its current slump. </P>
<P>And it isn't going to happen. At least, not in the foreseeable =
future.=20
</P>
<H3>The Real Problem</H3>
<P>Broadband video applications failed because of one simple =
reason: </P>
<BLOCKQUOTE>
<P><I>You can't watch TV at work.</I></P></BLOCKQUOTE>
<P>Face it, the vast number of internet users are using the =
internet <I>at=20
work,</I> instead of working. And broadband video is essentially =
the same=20
as TV.</P>
<P>Certainly on-line brokerage accounts owed their great emergence =
to one=20
simple fact: you could finally trade stocks at work. </P>
<P>Online trading software existed before the internet came along, =
but it=20
was largely considered a colossal failure. FOX (Fidelity Online =
Exchange)=20
software, manufactured by Meca Software (now defunct) was a huge =
disaster=20
in the early nineties. Why? Because you couldn't use this software =
at=20
work. It required that you dial-in, on a modem, to the system. =
Office PCs=20
didn't easily have this capability. </P>
<P>When the internet came along, access to online trading was =
simple.=20
Internet access, especially in the beginning, was completely open. =
<I>Anyone </I>could trade. Instead of calling your broker (which =
others in=20
the office would be able to hear), you could enter a trade - =
<I>and it=20
would look like you were working.</I> Not only that, but it was =
cheaper=20
than a trade from even a discount broker. </P>
<P>Online trading, and all of the associated internet activities =
with it,=20
boomed. Internet trading made an existing task easier and cheaper: =
<I>online trading</I> <I>liquified</I><I>the market</I> for market =
transactions. </P>
<P>The applications which were successful on the internet during =
Internet=20
I days all had the following aspect in common: they liquified an =
existing=20
trait or business. Chat rooms liquified water cooler talk. Email =
liquified=20
phone calls. Instant messaging liquified email. </P>
<P>But broadband video doesn't liquify anything, especially in the =
business arena. </P>
<P><I>Yahoo! FinanceVision failed because it is neither cheaper =
nor easier=20
than watching CNBC and most offices don't watch CNBC anyways!</I> =
Because=20
of this, no one was willing to pay for it. </P>
<H3>The Future For Business Broadband</H3>
<P>So if broadband is to succeed in the business market, it needs =
to=20
liquify an existing business function. </P>
<P>At the moment, teleconferencing is the most likely business =
event to be=20
liquified by broadband video. </P>
<P>However, here, audio already works remarkably well, and the =
price has=20
been continually dropping. Audio conference meetings are becoming =
more=20
popular and more frequent. Broadband audio conferencing stand =
little=20
chance of replacing the audio teleconference. </P>
<P>Webcasting of conference calls, now widespread, does not =
replace=20
ordinary teleconferencing, although it has reduced dial-up 1-800 =
costs.=20
However, those costs are replaced by the costs of providing the =
webcast=20
service. </P>
<P>Technologies such as webconferencing (Webex or Interwise, for =
example)=20
are growing in popularity. These allow a company to present =
Powerpoint=20
presentations or multi-media presentations over the internet. =
These=20
services <I>liquify a sales call. </I>They probably have strong =
futures.=20
</P>
<P>But the webconferencing technologies all work well with =
existing=20
internet infrastructure. Even rapid growth in webconferencing will =
not=20
provide a strong driver to building out the "internet II" network, =
with=20
the anticipated benefits to Cisco, Juniper Networks, Sycamore, =
etc.=20
Webconferencing services work well with today's infrastructure. =
</P>
<P>Other than webconferencing, what existing business function =
does=20
broadband replace, at lower and easier costs? If you cannot =
provide an=20
answer, broadband cannot be viewed as a dramatic driver of the =
internet=20
infrastructure. </P>
<H3>The Future For Consumer Broadband</H3>
<P>Consumer broadband prospects are even fuzzier. </P>
<P>The truth is that broadband simply costs too much for much home =
markets. Most people use the internet primarily for email and =
instant=20
messaging. AOL has about half of the consumer market - and that's =
what=20
they think the internet is - email and IM. </P>
<P>TV rules the video entertainment market. Broadband internet =
video is=20
neither cheaper (it is often more expensive than cable) nor easier =
(the=20
remote control beats keyboard/mouse easily) than TV. Until it is,=20
broadband will not dethrone TV as the video device of choice. </P>
<P>To make matters even worse, content for broadband video is=20
significantly worse than for TV, because the best TV content has =
been=20
syndicated to TV, not the web. </P>
<P>Pornography is the only significant broadband service. <I>It =
provides=20
pay-per-view video</I> and is a lot easier, and more private, than =
going=20
to the XXX video store. Quality of video does not matter. =
Broadband=20
pornography liquifies the existing porno market. </P>
<P>But there is nothing on broadband today that liquifies the home =
video=20
entertainment market. In fact, there is a lot working against =
broadband:=20
TiVo and DVD subscription services are just two major drivers. =
</P>
<P>Until broadband, internet-based on-demand-video gets linked to =
the TV,=20
and not the PC, broadband will not have significant penetration=20
difficulties in the consumer market. </P>
<H3>The Implications</H3>
<P>For those of you thinking "Great - why didn't you tell me =
earlier" we=20
did. Any frequent reader of our Stock Briefs knows that we have =
long been=20
discussing this. We became luke-warm on the "internet II" idea =
years ago:=20
</P>
<UL>
<LI><A=20
=
href=3D"http://www.briefing.com/scripts/sub/stocks/PowerAnchor.asp?varArt=
icleID=3DSB20001023075800rvgreen"=20
target=3DNEW>23-Oct-00 The Broadband Future Gets Fuzzy </A>
<LI><A=20
=
href=3D"http://www.briefing.com/scripts/sub/stocks/PowerAnchor.asp?varArt=
icleID=3DSB20001127082353rvgreen"=20
target=3D_NEW>27-Nov-00 The Internet: What We've Learned</A> =
</LI></UL>
<P>If you are still waiting for broadband - Internet II as it is =
called -=20
to rescue the tech sector - forget it. You need to develop another =
premise=20
for a major driver of technology stocks. (Good luck - we haven't =
been able=20
to.) </P>
<P>Broadband applications are likely to continue to develop, but =
slowly,=20
and not be a major driver of the overall technology market and =
certainly=20
not be a major driver of continued internet buildout. </P>
<P>Unlike cable TV or satellite TV, both of which took their =
markets by=20
storm, broadband video is still looking for the key element that =
would=20
make it a bull market: <I>liquifying an existing market. </I>Until =
that=20
happens, broadband applications are likely to continue to struggle =
to find=20
meaningful markets. </P>
<P>Yahoo! found this out the hard way with Yahoo FinanceVision and =
Yahoo=20
Radio. </P>
<P>Comments may be emailed to the author, Robert V. Green, at <A=20
href=3D"mailto:rvgreen@briefing.com">rvgreen@briefing.com</A>=20
</P></TD></TR></TBODY></TABLE></SPAN></DIV></DIV>
<BLOCKQUOTE dir=3Dltr=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; =
BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV style=3D"FONT: 10pt arial">
<HR>
</DIV>
<P> </P></BLOCKQUOTE></BODY></HTML>
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